If the dairy policy shifts being worked on by House Ag Committee Ranking Democrat Collin Peterson (D-Minn.) are included in the farm bill or some other effort that makes it to the House floor, a key lawmaker has signaled his opposition -- House Speaker John Boehner (R-Ohio). At his Farm Forum in Ohio recently, Boehner labeled US dairy policy as being very "convoluted," but warned that in his judgement, the approach Peterson has put together is "even more convoluted" and Boehner pledged he will fight against any such package.
Boehner on US dairy policy: During the Farm Forum held in in Troy, Ohio on Saturday, March 24, Boehner said, "Now for those of you who don't know much about dairy, the USDA sets the price of milk every month … and if you look at the formula they use to calculate the price of milk it will take you about 25 minutes to read it. I read it on the House floor one time to try to help people understand how milk is priced. And then if you've got milk, you can't just sell it any place you want to sell it because we have a milk marketing order system that tells farmers that they can only ship milk into this market. And then if milk is consumed in a bottle it gets one price, but if you use it for cheese it's not worth as much."
Boehner continued, "So when I say we have a convoluted dairy policy, let me tell you we have the most convoluted program you've ever seen. God bless Collin Peterson, he's the ranking member on the Ag Committee, a long-time friend of mine-- we got elected together, we served on the Ag Committee together - but he has taken this convoluted program and tried to convolute it even more. And I know that Chairman [Frank] Lucas (R-Okla.) needed to work with Collin Peterson to see if they could come to an agreement between the House and Senate ag committees, if in fact the Super Committee were going to have a product. But having said that, the chances of Mr. Peterson's new supply management program becoming law, in my mind, were zero.
"Now, I am a big believer in allowing the House to work its will - I don't get involved in many debates on the House floor, but I can tell you if this provision comes in the Farm Bill to the floor of the House my sorry ass will be down there to say something about it," Boehner concluded.
Perspective: Speaker Boehner has a long history of recognizing the Byzantine, outdated dairy policy of the United States. He has previously pushed dairy policy reform himself – with the support of Rep. Dave Obey (D-Wis.), arguably the most liberal member of the House Democratic Caucus and former Appropriations Committee Chairman, the two pushed an amendment that sought to terminate all existing Federal milk marketing orders on January 1, 2001.
Dairy reform legislation is beset with a lot of differences of opinion - heart felt and debated vigorously by all sides of the issue. But one topic stands out: support for and opposition to any supply management program.
The last time dairy reform was pushed via the farm bill debate was last fall, as Boehner mentioned, via the ill-fated attempt by House and Senate Ag panel leaders to attach a draft farm bill to the so-called Super Committee's failed attempt to come up with $1.2 trillion in budget reduction over ten years. While the draft farm bill language was never officially released, it was said to contain controversial language pushed by Rep. Collin Peterson (D-Minn.) and modeled on a plan first proposed by the National Milk Producers Federation (NMPF).
Federal dairy policy components are complex, but have primarily included (at various times):
- Price supports have been used to create market price floors
- Direct payments have partially moderated the effect of low milk prices on producers
- Assessments have tried to serve has an economic incentive to curb production growth but with limited impact
- Supply reduction (whole herd buyout/Dairy Termination Program, etc.) has included different approaches to curb production growth, but again with limited success
- Orders allow milk uses to be valued differently for orderly marketing
Rep. Peterson revised his dairy policy reform plan several times, including changes relative to the Dairy Producer Margin Protection Program (DPMPP) so it would continue to be voluntary, but if a producer opts to participate in the DPMPP, his or her participation in the Dairy Market Stabilization Program (DMSP) would then be mandatory. If a producer chose not to participate in the insurance program, then participation in the DMSP would not be government-mandated. Last July, Peterson released draft legislation incorporating the key elements of the National Milk Producer Federation's (NMPF's) Foundation for the Future plan. This draft was modified to reflect NMPF's revisions and was formally introduced on Sept. 23, 20122, as the "Dairy Security Act of 2011" by Peterson and senior House Republican Mike Simpson (R-Idaho).
A similar bill was also introduced in the Senate by Sen. Dick Lugar (R-Ind.).
Sen. Kristen Gillibrand (D-N.Y.) followed with an amendment that would prohibit dairy producers who receive government milk margin support from participating in mandatory supply management. Gillibrand, noting that her state of New York may be facing a milk shortage to supply its growing yogurt industry, has proposed unlinking supply management from income insurance eligibility.
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